Freakonomics Radio - 544. Ari Emanuel Is Never Indifferent

Episode Date: June 1, 2023

He turned a small Hollywood talent agency into a massive sports-and-entertainment empire. In a freewheeling conversation, he explains how he did it and why it nearly killed him.

You know the funny thing, just before I answer that question? Ariel Emanuel is telling a story about his family. They lived in Chicago. His mother grew up there. His father had immigrated from Israel. They were not a boring family. There was always change in our lives. When Ari and his brothers were kids, they spent summers in Israel.

They would always do things that they would shave our heads in the summer. So we would walk around when we come back from Israel. People didn't do that back then. Why did they shave your heads? Who f***ing knew? I still shave my head on the same day that they shave my head. I'm 62. So in two weeks, my hair will be gone.

Because that's when they shaved my head and I still f***ing do it. It's insane. His mother was a civil rights activist who took the kids with her on protests and was arrested several times. His father was a pediatrician who sued the city of Chicago for allowing the use of lead paint. He also quit the American Medical Association because they didn't support national health care. You know, newly to the country, stood up for what he thought was right. And even if it was going against the organization that he was just starting his practice, he didn't care. When you look at how you approach the world, how you deal with people, in business especially, do you think you got more from your mom or your dad?

Well, here's what I get from my dad. My dad, he had common sense. He was a hard, hard worker. I mean, sick, not sick. He was in the office. He was working. He was fast. He didn't take bullshit or, you know, he had a lot of common sense.

And then my mom was just tough. She didn't give a shit what people thought. She was going to stand up for what she thought. And the good thing about both of them, it's funny, I just went to the eighth anniversary of the uprising. The Warsaw Ghetto. Warsaw Ghetto uprising. And one of the survivors there had this whole thing about indifference. And I thought about my parents, and they were definitely not indifferent. When I heard that, the light bulb went off, because they taught us in anything we do, whether it be casual, fun, professional, or social,

you can't be indifferent. And that moment when the survivor, he was 94, 95, talked about the 11th commandment, thou shall not be indifferent. That just seeped into our system without them telling us anything. And I'm definitely not indifferent in anything I do. You have probably heard of at least one of Ari Emanuel's brothers, maybe even both. There is Zeke, the oncologist and medical ethicist who helped write the Affordable Care Act. And there's Rahm, the politician, chief of staff to President Obama, senior advisor to President Clinton, also a former congressman and mayor of Chicago. Today, Rahm is U.S. ambassador to Japan, where he is reportedly keeping a close eye on

China. He's definitely not indifferent. I think he's enjoying the position and enjoying learning everything he's learning from that region, which I think is a very important region for geopolitics. And he is definitely not a wallflower. Ari is the youngest of the three brothers. They were extremely competitive as kids, maybe more so in adulthood. I pick my parents up from the airport, and I'm driving them to the house. And my father's asking me, you know, what's going on. I'm giving him information about all the things that we're doing.

I think it was my mother, but it might have been my father, goes, as I'm describing all the things that I'm doing. And he goes, because I was the dumb one. He goes, who does all that? And I say to him, classic, you can't be, you know. I said, well, it's not Rahm and Zeke. And so, yeah, I've gotten over that. I'm no longer angry.

So your dad probably thought Zeke was noble for becoming a doctor also. Oh my God, and Rahm the politician. Oh my God, you know, Jewish family. And you're the Philistine. The definition of intelligence in our family was reading. It was untold, but you could tell. Now, did you not get any bonus points for the fact that you had dyslexia? No.

You know, the grades would come up, our report cards, on the fridge. I was competing with Zeke. There was no chance. Dean's List, he was the debater. Shut up. The angry little brother. The one with dyslexia as well as ADHD, the one who loved to fight, the one who wasn't a reader, the dumb one, in his words, Ari Emanuel has done all right.

He started in the mailroom of CAA, the big Hollywood talent agency. Today, he is the most famous agent in the world, as well as the CEO of Endeavor, a global sports and entertainment firm that went public in 2021 and earned Emanuel a few hundred million dollars. He's considered one of the best negotiators in Hollywood. Also, one of the fiercest advocates, if he's on your side, and one of the most brutal opponents, if not. You may have seen the hit HBO series Entourage. Emanuel helped package that show, and he inspired its most entertaining character, an agent named Ari Gold, played by Jeremy Piven. If it's $100, please put it in a brown paper bag,

along with a nice big pile of s***, and send it over there. That Ari had a temper. He swore pretty much constantly. But he also stuck to the cardinal rule of agenting. No matter how brutal the negotiation, you have to mend fences and get ready for the next deal. I'm kidding. Don't f***ing mention that review again, all right? I'm not. You want to hug it out?

No, not really. Let's hug it out, bitch. Today on Freakonomics Radio, a one-on-one with the real Ari Emanuel, who may be more entertaining than Ari Gold. Really, really, really, really, really. We will hear about the Ultimate Fighting Championship, Meghan Markle, the Saudi Arabia Public Investment Fund, and his daily consumption of live microbes. Emanuel likes to present himself as an uncomplicated person, but he's not. His complications are what drive him, and we'll hear about that, too.

Okay. That's not happening on this podcast. Sorry, Ari, but it's happening right after the Bomp Bomp Bomps. This is Freakonomics Radio, the podcast that explores the hidden side of everything, with your host, Stephen Dubner. Whoa, whoa, whoa, whoa, whoa, whoa, whoa, whoa, whoa, whoa, whoa, whoa, whoa, whoa, Ari Emanuel has a famously short attention span, which he blames on his ADHD, but it has also been suggested he uses it strategically as a way to get out of conversations that bore him. He doesn't do a lot of interviews, especially long ones, so I flew to Los Angeles to meet in person. That way, I was told he might be more inclined to stay put. I was also told he's always early, so I got to the studio 30 minutes ahead of time.

He was right behind me. As the engineer was setting up the microphones, Emmanuel took a work call, and when that was done, he started asking the engineer some questions. And then when you say you go on the road, what does that mean? He's known to ask a lot of questions. What's the cost behind that? For us? Yeah. He's known to ask a lot of questions. Are you buying this by the end of the day?

That's such a crazy thought. He didn't end up buying the podcast studio, but it wouldn't have been shocking if he had. Emanuel is a deal-making machine. That's how Endeavor got to where it is today. 11,000 employees in 36 countries with revenues of $5.3 billion last year, most of it from their sports properties, live events, and old-fashioned agenting. They represent a lot of big names, Oprah Winfrey, Dwayne the Rock Johnson, Ben Affleck, Larry David, Martin Scorsese, and as of very recently, Meghan Markle, the Duchess of Sussex. Emanuel's first big deal was in 2009 when his relatively small Endeavor agency merged with the much larger and more historic William Morris agency. Since then, he and his partners have bought all or part of

the following. IMG, a sports, entertainment, fashion and media agency. The Miss Universe franchise bought from Donald Trump and since sold. A sports betting tech firm called Open Bet. The Professional Bull Riders League, the Freeze Art Fair. And in 2016, the Biggie, the Ultimate Fighting Championship, or UFC, the huge mixed martial arts league. That cost $4.2 billion. This year, Endeavor went even bigger, spending $9.3 billion to acquire WWE, the pro wrestling league that's part sport, part soap opera, mostly cash cow. Emmanuel plans to turn this fighting empire into a new publicly traded company called TKO, which will be majority owned and controlled by Endeavor. Over the years, there have been dozens of other acquisitions or partnerships, a European basketball league, ad agencies and lecture agencies and agencies representing gamers. Also, a firm called

On Location that sells high-end fan experiences at the Super Bowl, Wimbledon, and other sports and entertainment events. For what it's worth, even I have been gobbled up by the Endeavor machine. They own the agencies that represent the work I do in writing, public speaking, and podcasting. Anyway, the conversation you're about to hear is a bit of a raging river. If you had one label to slap on a manual, the best choice might be contents under pressure. But we'll start with a straightforward question. How many phone calls do you make a day? A lot. A few hundred? No, but it's just a lot. I mean, I make a lot of calls. I think all those are exaggerated.

I make a lot of calls. I have no idea if it's at five or 50. One person who's spoken with you a lot on the phone said that the average duration... 30 seconds. That's right. Okay, so that's how you do it. I'm not a person, then you pick up the phone. I mean, I'm trying to get better at this.

Like, hey, how you doing? Yeah, I don't do that. I don't do that. That's bad. I know it's bad. They get on the phone. I usually start talking to know it's bad. They get on the phone. I usually start talking to the assistant as if the person's on the phone. I have to start saying hello.

Did you read the Bob Odenkirk memoir by any chance? No, but he... You're in it. There's this one great moment where you offer him a job. He's like, I started to say yes, but by the time I got to ye, Ari was off the phone. Yeah. And then he also said, as of this writing, Ari Emanuel represents most of the chemicals in the periodic table. I started the firm in 95 on my birthday, March 29th.

With the concept, I read a book by George Gilder, who became a friend, Life After Television. And he talked about infinite distribution. And I thought about it and talked to him a lot. And I said, wow, there's going to be more distribution than ever. Then all of a sudden, the WB happens and UPN happens. Those were two networks at the time. So it went from four networks to six. Cable really hadn't started.

It had, but not to the extent. And he said to me, you know, content's going to be more valuable. I was one of the big television agents. I didn't want to work for anybody. And I said, you know, I got one of the best television client lists ever. I'll put some shows on, I'll get packages, I'll make a lot more than what this could be. And then we, you know, the world changed. We just had cash, and we just started playing. And I had this idea about what this thing could look like. There's going to have to be a different way to market companies and sponsorship.

Getting IMG. I had thought about all that stuff. That it happened is insane. Because why? Just because it's hard to... Because it played out it it actually played out like you can think things you never imagine them to play out that's why when i was meditating yesterday i was like you know we wait i thought when you're meditating

you're supposed to like no but i started thinking about this i was like oh am i meditating like hopefully i get to the place where i don't think. But when I think about it, I was like, most of the time in life, you're chasing. And I just was very happy about, you know, my life is really good. This was recently. It was yesterday. And I said, be happy. Like, look what you have. Does that work?

It did work. I felt really good yesterday. When you're looking over the hedge, what's the next target? If you could own an NFL and an NBA team? No. Because why? Here's what I think. And I have no idea if I'm right. Maybe I'm a control freak. There's no real control there. I think those are ego plays. And I try and make sure that it's not ego that I'm doing this for. Did you watch UFC before you bought it? Well, what happened was we had this whole research department that we thought was important inside the company,

and people were like, why did you do that? Well, one, it gave us an advantage of getting shows on the air, keeping them on the air by about 15% to 20%. So when we were going for renewals of TV shows, our research people would be giving us the data that the networks would be having, like, okay, here's how the show performed. Why did you need your own research? Why weren't you getting good enough data? Because I wanted some insight of what they were thinking so that my arguments about how to keep a show back on, but I had ammunition as opposed to, isn't it a good show? And they wouldn't share that data with you?

The networks, of course not. And then I'd always get these things like, what's new out there that's performing? And then one of my researchers said, you know, there's a show on Spike. I'm looking at the numbers and it's ticking up. I said, what the f*** is that thing? Because I didn't know. So I started watching it. I loved it.

I then called Dana. And I think I called Lorenzo. Dana is Dana White, the UFC president. Lorenzo is Lorenzo Fertitta, one of two brothers who were the UFC's primary owners. They were making a TV show called The Ultimate Fighter. It ran on the Spike cable network for 14 seasons. These days it's on ESPN and ESPN+. So when Emanuel saw the viewership numbers for this show rising, he called to set up a meeting. We had a bad meeting.

I gave a bad meeting. I think I referenced the WWE, and I just gave a bad meeting, right? And then... Wait, when you referenced that meeting, we represented WWE, here's what we can do. But they didn't like being compared because of the... I don't know, Dana reports that I didn't do well, which is fine.

It's not the first time. But I just did my normal thing, just kept on pounding away with phone calls and talking about what we could do and what they're not thinking about and where they should go and how they should think about their deals. About six to a year later, Dana calls me and says, if you can get me a meeting with Ross, who is the head of boxing at HBO, I'll sign with you. Ross was Ross Greenberg, and Dana White was saying that if Emanuel could get him a meeting with Greenberg, and Dana White was saying that if Emanuel could get him a meeting with Greenberg, he would sign with Emanuel to negotiate the UFC's TV rights, not for the UFC to be acquired. That would come later. Now, at the time, I mean, think about it. I had entourage. I had sex in the city.

I mean, I was involved with, like, a lot there. I said, what? That's like I have to jump over a pebble. He goes, if you can get me this meeting, I'll sign with you. I said, done. I called up Ross. I said, I need to meet with Dana today in an hour. He says, done.

They meet. I don't think the meeting went well. Maybe it's Dana that doesn't give good meetings. Whatever. No, Dana actually gives very good meetings. And then they signed with us. I think their deal was, at the beginning, they paid Spike. And then Spike started paying them, I think it was like $15 million.

Oh, that's not nothing. Yeah, that's nothing. And then I think we got them in the next renegotiation, I think we got them $75. And then we just started. We helped them with their video game deal and just helped them. And at what point then did ownership become a natural conclusion? Well, I always wanted it, but they were doing well. We realized we wanted half of our business to be representation, half to be ownership. We had this big kind of off-site thinking about the world and where it was going and what we should be doing and what the representation gives us insight to and what

we could do because of how big the company was now and all the different assets we had in our architecture, that if we had ownership, we could extract more value. And so we wanted to be in the sports business. There's not a lot of sports you can own. And Frank and Lorenzo wanted to sell. At the first go-around, we didn't do it. They wanted a big number. What was the number they wanted? It was $4 billion.

Oh, which is ultimately what they got. They got $4.2. But then the second time it came up, we were ready. And then a bunch of other stuff happened that were handicaps, but we got through them. I mean, the Brexit happened, the banking system. At every beat, it was a nightmare, but you just got to plot through these things and take the pain. So someone who was involved in that sale, he said that whatever information someone had and thought they had a lot, that you would like triple. You had it from every element.

You had it from the bankers, the financiers. You had it from inside UFC, et cetera, et cetera. So assuming that's true, how do you do that? Well, that thing sitting on the desk, my phone, is my maybe superpower. I am not afraid to call people. I'm not afraid to ask a lot of questions. I'm not afraid to ask a lot of questions. I'm not afraid to get a lot of information. I mean, it's funny. I was, I don't know where I was. My son, Noah, was around me. He was just sitting in the corner doing something, and I was

doing my normal thing. I was starting my process of calls and that thing I do. And after about a half hour, an hour, he goes, that was crazy. I guess I had flown through a lot of calls and talking to people that led to this whole web, maybe because I've been doing it for so long. And it doesn't seem unusual. It doesn't seem unusual. And for him noticing it, I'm like, to explain why you've been so good. And the example he gave was a few times now you've bought companies, UFC chief example, where most people say, holy cow, that's way too much to pay. And then within just a couple years, they're worth much, much more, apparently by either great negotiating and contracts or alchemy of some kind. I'm going to assume it's not alchemy. So can you describe how you made that happen in a way that a lay person can understand?

So when we were looking at it, we said, okay, what are the things that you could own that you could extract greater value for either in cost savings, in what we call architecture, meaning through the system that we've built, or in license fee negotiations. And there's only a couple. And we wanted to be in live because we understand the power of live. And so when we looked at that, and yes, we bought it for over 20 times. But if we made the new deal and we had it mapped out. And the timing was good. The deal was about to expire. Yes? Right. It was about a year, a year and a half. If we did that, then the multiple that we paid was 10 times, which would be the cheapest multiple for a sports right ever. Now that's a big bet.

If you're talking about poker, we push all the chips in. And then once we pushed them in, what happened? Donald Trump said to AT&T, we push all the chips in. And then once we pushed them in, what happened? Donald Trump said to AT&T, you can't buy Warner Brothers. Okay, this needs a little explaining. First of all, Emanuel used to represent Trump, but no longer does. And he no longer did by 2016 when Trump was elected president. Emanuel was trying to get a deal for the right to show UFC fights on cable. The three most obvious buyers were TNT, owned by Time Warner, ESPN, owned by Disney, and

Fox. But at the time this was happening in 2017, the parent companies of those channels weren't in a position to make a big deal. Time Warner was fighting the Trump Justice Department for the right to merge with AT&T, and Disney was negotiating with Fox to buy a huge package of their movie and TV assets. And so all the buyers were out for a period of time, and my clock was ticking on my rights. So I was uncomfortable. You must've been not sleeping well.

Well, I got really sick actually. Did you? My thyroid went crazy. I went down to like a crazy weight because I had hyperthyroid and- From stress? From stress. Holy cow. Yeah. Recreate a phone call you would have made at that moment to try to break the log jam. Like,

who were you calling? I was calling everybody. Were you calling Trump? No, no, no, I didn't do that. There was nothing. So we thought we had a deal with Amazon. That didn't happen. That was upsetting. We went back to Paramount and wanted to do a deal on Spike, our original place. Comcast said no, and we were out of luck. Did you think it might sink you? Oh, I was really nervous. I mean, not sleeping nervous, sick nervous. And then the ESPN Disney deal goes through.

Kevin Mayer, we make a deal with because- That's ESPN? He was head of strat planning at Disney. They were about to launch direct-to-consumers ESPN+. And so, it's funny. I think Dana talked about this in a podcast. The former head of ESPN, John Skipper, was not a fan of the EOC. He thought it was tacky for that network, right? He thought it was beneath them. He then gets fired for personal, just personal reasons, whatever. In case you're curious, John Skipper resigned from ESPN in 2017 after someone he bought cocaine from tried to extort him. Doesn't matter. And then it goes to Kevin Mayer, who realized the value of UFC

and pay-per-view and direct-to-consumer. Did you pitch him on PPV, pay-per-view and direct-to-consumer. Did you pitch him on PPV, pay-per-view, or did he pitch you? So we pitched him on fight nights. Yeah. And then after the first fight night, which was in Brooklyn, went crazy great, we then came in and Bob Iger got it, said, we want the pay-per-views because you can charge for the pay-per-views because you can charge for the pay-per-views. You can even make it bigger on plus, and you could do this whole matrix.

Kevin and him got it. So I don't know anything about agenting or negotiating, but I would think if you only had one legitimate buyer, which is what it sounds like, right? Everybody else was a no. How were you able to get so much from ESPN? Why didn't they drive a bargain? I think they got a bargain. When's that term up? I think we're going to start probably next year. So what do you predict the next deal will look like compared to the previous? Really, really, really, really, really, really, really, really, really, really, really, really. Okay. Okay.

Okay. That's not happening on this podcast. I don't know. I'm a farm boy. I'm just asking a question. Yeah, you're a farm boy. After the break, how COVID almost killed Endeavor and why Endeavor doesn't own Formula One. I'm Stephen Dubner. This is Freakonomics Radio. We'll be right back. The COVID-19 shutdown was plainly bad for business in many sectors. A firm like Endeavor was particularly vulnerable since it relies on live sports and entertainment. The UFC was one of the first events to come back at a location in the United Arab Emirates that they called Fight Island. Dana White's a genius. Hey, get me an island. We make all the calls and we do the thing and he willed it. And this was a crazy, we had to get planes and testing and isolate the island. The logistics were insane.

And Dana just muscled up and did it. And that permitted us to, I think, get a whole new generation and changed our sport. Do you think the NFL and NBA would have even played that season if Fight Island hadn't happened? I don't know. You have to remember, we were all talking. I was talking to Vince.

I was talking to Roger. I was talking to Adam Silver. Emmanuel was talking about Vince McMahon, commissioner of WWE, Roger Goodell, commissioner of the NFL, and NBA commissioner Adam Silver. And Formula One did a great job because what they did is they created that TV show in a time when everybody was sitting home watching stuff, and then everybody became a fan through that show. The TV show he's talking about is the Netflix series Drive to Survive. By the way, Emanuel once tried to buy Formula One. This was about seven years ago, shortly after Endeavor had bought the UFC. And at that point in time,

CVC, a PE firm in the UK, owned Formula One. And I had been working CVC for two years, three years, to buy Formula One. And all of a sudden, it comes up, they want to sell. So we have a meeting. Brexit had just happened.

We hadn't done anything yet with the UFC. And people thought you overpaid at that point. Oh, yeah. And I wanted to buy Formula One right away. Yeah. What was the price? Now, at the time, they didn't have the TV show. A bunch of stuff had not been in place, which they've done an incredible job.

He understandably, because, you know, I think it was $10 billion, said no. I understand why, because we had just bought this, we had not even accomplished anything. The timing was wrong. If you hadn't bought UFC, you'd own Formula One now, perhaps. Perhaps. So that was one that got away that I wish it wouldn't have. Did you think COVID might kill Endeavor? It was bad. I'd never had to fire that many people. The team that really kind of organized it, I have one of the greatest presidents of all time, Mark Shapiro. He's an incredible executive.

Mark ran ESPN? Mark ran ESPN and Six Flags. He's very soulful. And then Jason Loovlin and Andrew Schleimer, our CFOs, they put a plan together and we executed against it, plus keeping the UFC on. We did about, I might be wrong here, but I think about 70% of our revenue in the COVID year. We had our ESPN deal. We then started making deals for writers. So we stored all the cash. We didn't let anything out.

We let people go, which was horrible, or furloughed them. Did you think for a time, though, that you might? Oh, yeah. There was three months that I was like, you know, I mean, it was bad, And we were just counting cash. How do we make sure the cash can last? So I did just want to ask if you don't mind, like, I noticed you don't do a lot of interviews. And I have to say it's disappointing because, I mean, I'm not just blowing smoke, but I've admired

you for a long time. And we did have a- That's embarrassing. You should be embarrassed. Because why? Are you not admirable? I mean, you know, I look at people and maybe because I'm older now and I don't know. I mean, not that I don't respect people. There's not many people worth admiring yourself. Yeah, admire.

That's a weird word. I mean, I think, you know, I respect Elon. I mean, there's a bunch of executives I respect and think they're really great. Admire is a weird word for me. I don't know why. Elon, as you may have figured, is Elon Musk, whose properties include Tesla, SpaceX, and Twitter. I have a couple of questions about Elon since you brought him up. So first of all, he was on your board and then not. What was that about? We have a gambling B2B business. We just acquired about a year, year and a half ago, OpenBet. So when you do that, you have to go state by state and get licensed. And so does the board. So, you know, him giving up all of his documents to all these people,

he just called me up and says, I'm not doing that. And I said, listen, I get it. No problem. Got it. I love you. Endeavor, though, did invest in Twitter when he took it over.

So why'd you do that? If you're going to bet on somebody, I would bet on that man, on anything he does. Because why? What is it about him? I admire him. No. Some people play chess and some people say, he plays multiple levels of chess. He plays this online game that is like, I don't even know what it was called. He showed me over the summer. It was crazy how complicated and like, it's more complicated than go. And you're sitting there saying like, if you're going to bet on

somebody and he is also not indifferent and he's curious and he's passionate in this space, you're going to bet on that dude all the time all right i have to ask you one more elon musk question there's this famous picture paparazzi photo right can we just not ask this question well i really want to ask about your fitness though oh okay last summer musk and emmanuel vacation together on a a yacht in Greece. The paparazzi photo that went viral showed Emanuel spraying Musk down with a hose, both of them shirtless. You're there with a six-pack, maybe eight-pack. Right. And he looks kind of like a keg or something.

He looks great right now. He's lost a lot of weight. Well, I'm just curious. State briefly your fitness and nutrition regime for people i don't know how long does this podcast last i mean it's so stupid what i do it's gotten more and more complex but i'll give you this morning i woke up i think 4 45 i take either depending on the tie helmets or uk helmets which are live microbes for my gut. I then get a cup of coffee. I drink one cup of coffee. No cream, no sugar?

No cream, no sugar. I go into the gym. At home? At home. I have a gym at home. I do a dynamic warm-up, which is about 45 minutes. By yourself or trainer? By myself.

No longer any trainers. Today I did bike hypoxia training. I sprint on the bike for a minute at a very high level, take it down to a very low level, put a mask on that takes me up to 22,000 feet for three minutes. I do that for 25 minutes. Then today I did a weight program, chest, tris, shoulders, legs, and stomach. Then I went in, I did a sauna. I meditated for, I think today was 17 minutes. Got an ice bath for four minutes. Steam, got out, take my vitamins.

And then usually Fridays I don't eat. I'll have dinner Thursday night, won't eat until Friday night. So to most people that would be an extreme regimen, let's say. Right. It's like my phone calls. I don't feel it's extreme anymore. I know. But the degree to which you go, some people could interpret it as like a control thing. Like you want to... No, it's a vain thing. Oh, is that it?

Yeah, of course. There's a portion of it that's vain because I cannot stand not being in shape. I can't stand it, actually. It does take sacrifice and work. It does. I'm willing to do that. And I'm consistent. If nothing else in my life, I think it's one of the things that has permitted me to be successful. I am consistently consistent.

Not just with this, with everything. With everything. So if you were going to give life advice... Some of them would be, don't be indifferent. The other one is, be curious. The other one is, be comfortable in the uncomfortable. Another one would be, show up. Meaning, half of my success,

like that phone call I took beforehand, is, do I want to take that meeting? No. But I want to get to this. I'm going to take that meeting. What was that meeting? It was just a company that I want to buy. And then try and be as consistent as you possibly can.

There's also something you once wrote, six lessons you live by it. One of them was the only constant in business is change. Get comfortable with it. Yeah, that's about being comfortable in the uncomfortable. Over time, I've just been realizing that I can handle a lot of discomfort. These things are not comfortable. Not eating for a day. So it's training. Training your mind to be comfortable, to get through stuff, to have stamina. Being a leader is not about how many punches you can throw.

It's how many punches you can take. Trying to buy a company is about how you can last through the brutality of it. Because it's brutal, right? They want certain things. You want certain things. You want certain things. You're going at it and just hanging tough. Yeah, you just have to be comfortable in the uncomfortable. Where do you think that comes from?

You know, I was never comfortable reading or in a class. I remember because we just Passover, I'm Jewish, Passover just happened. So I remember the anxiety I used to have. Of being the youngest kid having to read the four questions. Oh. I mean, it was hell. It was actually hell. I would be so nervous and not happy, really not happy. And it still gives me, when Passover, and I hear Passover, it gives me such anxiety. Your primary association with Passover is... Is that.

You know, I got through it. I got through class, not being able to read. How often do you talk to Zeke? Once a week? Five times a week. That's also known as every day to most people. Well, seven. Seven, yeah.

I talked around probably the same. Uh-huh. And what are the conversations? We talk about either a book, a situation that happened in the world, my mother, siblings. For sure, there's always a Sunday call, right? The Sunday has to happen, as my father once said. Something wrong with your fingers? I said, Dad, you know, your fingers also work.

The phone lines go Chicago, L.A., not only L.A., Chicago. What does your mother and what did your father think of your line of business compared to the brothers especially? My father wanted me to go get my business degree at Northwestern. And that I was making, I think the base was $200 minimum, and then 15 cents a mile when I went into the CA mailroom. He lost his mind. He goes, you can always keep your piece of paper. They can take it away from you. And I was like, Dad, I think there's something big out here. He didn't get it. And what does Zeke think of your success? I have no idea. I think he's happy for me. But as you like, you'd take him to a Superbowl now and again and stuff like that.

Does he enjoy it? That's not, that's not him. But when he wants to go to SNL or tennis matches or whatever you want, I mean, yeah, I mean he gets. And what about Rom?

What's Rom think of your success? I don't know. Hmm. I don't really. When you're the little brother, even though you're 62 now, you're always a little brother. Here's funny.

I don't know if you saw. Zeke came out with a book. The brother's book. Yeah. And we did an interview at Microsoft CEO conference. You know, I'm not a wallflower. Ram's not a wallflower. Zeke's not a wallflower.

So we go up to the interview. It's all three of us. And immediately we turn into the siblings. It's Zeke in the lead. Ram fighting for it. Me shutting up. It was hysterical. One thing you can't hear in a radio interview, when Emmanuel talks about himself and his brothers, he occasionally flicks his middle finger at them. I should have asked whether it was intentional or involuntary. Either way, you get the idea that there is no fight

that Emanuel will back down from. This, too, goes back to childhood. I love boxing. I mean, I grew up on boxing. Friday night fights were incredible. After the break, we'll find out just how comfortable in the uncomfortable Emanuel can get. It was just very difficult.

I wish it had not happened. I'm Stephen Dubner. This is Freakonomics Radio. We'll be right back. If you want to get a sense of how efficient Ari Emanuel is as a dealmaker, efficient perhaps to the point of exploitive, consider how he works both sides of the aisle when it comes to supply and demand. Look at the sports properties that he and Endeavor have bought, like the UFC and WWE. These are individual sports without labor unions where the athletes collectively get a relatively low share of overall revenues. A handful of stars make big money, but in the UFC,

the athletes collectively receive just 15 or 20 percent of revenues, and that figure is probably even lower in WWE. Compare that to a league like the NFL or NBA, where the athletes do have a union and collectively receive about half of league revenues. In those leagues, Endeavor represents the athletes. In this year's NFL draft, for instance, they represented three first-round picks. In the upcoming NBA draft, they represent four players who are projected to be lottery picks. In other words, if a given sports ecosystem has high labor costs, Endeavor is likely to represent labor. If a different ecosystem has low labor costs, Endeavor is likely to opt for ownership. Considering how much Emmanuel likes boxing and the fact that his new business created

from the merger of wrestling and ultimate fighting will be named TKO, you might think Endeavor would try to get into boxing as well. And UFC president Dana White recently said he is looking to launch a boxing promotion of some kind. But that might be tricky because of what's known as the Muhammad Ali Boxing Reform Act. That's a federal law designed to protect fighters from being exploited by and underpaid by boxing promoters. This is one of the eternal conflicts in any economic system, the share of revenue that goes to labor. And that conflict can get exacerbated as there's more consolidation. That's what I wanted to talk to Ari Emanuel about next.

Although, as you will hear, the conversation wandered a bit. Consolidation is happening in every industry all over the world. Private equity, I think, very quietly has changed the global economy, the U.S. economy, in many ways that are not good, especially in healthcare. In your industry-

I think consolidation in one area is really bad for our economy right now. Which area is that? The food area. Why do you say that? Because I think what they're making us eat is making us sick. Whether it be the antibiotics, whether it be all the, you know, corn's so bad for you, I don't want to get any, thank God I'm not on social media. How they're feeding America and the world is disgusting. And that's going to be our biggest global problem. And that consolidation is the one.

The rest of it... What about in healthcare, though? Does that not concern you? No. Because why? It just doesn't. I don't think about it. A friend of mine said,

how do you fix the third act in the first act? So if we can fix the food problem, the healthcare problem, which is probably the second act, and the third act. So if we can fix the food problem, the healthcare problem, which is probably the second act, and the third act, gets fixed. So we got to get to the first act. And the first act is what we put in the system

and exercise and all that other stuff. And so let's fix the first act. The first act is the food. And if we do that, I think a lot of problems get solved when you think about the equation of health. Health care. And that food situation, I think there's only four major players, maybe five. Is your brother, Zeke, as...

Oh, I don't actually ask him. I don't care what he thinks. When I talk about all my craziness that I do for my health on eating and helmets and all that stuff... Do you think you're nuts? I only ask... No, actually, he's coming around to it. Like, he's starting to do... He fasts. that I do for my health on eating and helmets and all that stuff. Do you think you're nuts? I only ask... No, actually, he's coming around to it. Like, he's starting to do...

He fasts. I heard him say something very admiring about your level of knowledge about the microbiome. Yeah. I always ask him when I'm about to do something crazy with, you know, hacking myself. I said, okay, just give it to me. Can it hurt me? If he says no, I do, okay, just give it to me. Can it hurt me? If he says no, I do it. Give me an example.

Well, I take live microbes. And I said, Zeke, can it hurt me? And Zeke did his work around it. And he goes, no, I don't think so. And I said, okay, I just did it. Boom. And I drink them. And he's now like,

wait a second, this f***er might be right. And I've been doing this now for 12 years. The conversation now turned to artificial intelligence. When we spoke, the Writers Guild of America was threatening to strike, a threat they have since followed through on. One key concern was that content producers would start using AI to write scripts, and script writing still represents a significant piece of Endeavor's business. My opinion about AI is the following. My son Leo's at Michigan, and he's in computer science.

He and I were having this conversation, and I'm telling him programming is going to go away. And he says, Dad, here's my opinion about it. Computer versus computer and chess, draw. Computer versus computer and human, computer-human win. And if you talk to George Gilder, he would say technology is only added to employment. Elon would say something else. It is going to be a very important development tool. Do I think it can create like Jim Brooks can? No. Could it help Jim Brooks? Yeah. Jim Brooks is James L. Brooks, a legendary writer and producer known for creating The Simpsons, The Mary Tyler Moore Show, and many others.

Do I think there's protections we have to put in place for music and books writing? Yeah, I do. But, yeah, that's just change and normal. The one thing that we're doing is we're looking at the world, okay, can you AI live entertainment? No, can't. Elon said to me at one point, it was very funny, it made me nervous. He says, Ari, do you have dogs?

I said, yeah. I have four dogs. He goes, well, here's what AI is to you. You're the dog. Like, you know, that's a crazy. Dogs have a great life, right? I guess. Well, all that means to me is we're going to have a lot more free time.

And experience, the experience economy is going to be very important. But you say you can't AI live entertainment, but let's expand it to virtual reality, augmented reality, et cetera, et cetera. Yeah, you can do that. That's entertainment. And I would think that in your business, that would be a massive upside. Yes. That's the only thing. You're going to have the live, and then you're going to have, there's a whole other audience that wants to do other things, and we'll figure that out. I would love to be center court at Wimbledon without having to leave my room. That's a nice application, presumably.

Probably. I'd love to see what it feels like to get hit in the octagon. We're in the middle of a bunch of that stuff right now, looking at it and seeing what we can do. It was not done yet, but we're working with a lot of people to figure that out because I agree with you. How do you like being CEO of a public company? What's the difference? What's the difference? I mean, everybody said, oh, you're not going to like it. I don't know. You're just working the phones and doing your job and telling your story. You think this stock should be worth more

than it is? Oh, yeah. Yeah, so what's the problem? I read this morning you signed Meghan Markle. Congratulations. Thank you. I think Meghan Markle moved your stock more than WWE acquisition. I mean, I think it takes time

for people to realize the value. I think one of the things that's going to happen, we split off and we're going to have a new company, TKO. And then we just sold our IMG Academy. Yeah, why'd you sell? Well, somebody knocked on our door and said, we're going to pay you X amount. It was one and a quarter billion? Yeah. For something that the street gave me zero for. So I think now the street has got to start, I hope, or this is going to be my pitch to the street, I should say,

hey, maybe there's more value inside this thing you're not valuing once the UFC's out that you should start paying attention to. And I think they're going to have to pay attention to it now because the UFC's not in it. Once UFC is out, the revenues in the remaining company endeavor are very good. I can't talk about it. No, I'm not asking the number. I want to know where they come from because what share is agenting and what share is… Well, you are asking. They come from the betting business, the gambling business.

They come from On Location, our events. On Location is a business we bought in conjunction with the NFL. The NFL owned it. They did these high-end experiences at the Super Bowl. And we thought with all our events, we could do high-end experiences at all of our events. Plus, we could go after other high-end experiences, like the Olympics, which we just signed,

and create these unbelievable experiences around us. These are fan experiences. Fan experiences. Live fan experiences. Like, at the UFCc you sit next to dana why you get into the ring you stand on the stage when the weigh-ins have same thing with the super bowl same thing we're creating with the olympics then there's img we represent 150 sports we do the production great business and then there's all the representation business at William Morris. And so those three remaining buckets are, I think, very valuable in today's world where there's a lot of sports betting.

There's a lot of people that want experiences from live entertainment. The representation business has been around for over 150 years, and it ain't going away, and it's a great business. You're not going to like this question, but someone wondered to me whether you have taken your eye off the representation business to the point where, you know, a Brian Lord from CAA or any other number of big-time agents may start eating your lunch. Well, I think what they should just do is call Tyler Perry, call Adam McKay, call Larry David, call Dwayne Johnson, call Marty Scorsese. But are you worried about not being the biggest dog? No. We're the biggest dog by a lot.

We still represent a lot of clients. Anytime they need us, we're there. You still like agenting? Love it. But when we bring things to the table, any of the people at the company, unlike UTA or CA, they have this whole other world they can pull from, which is what's needed at an agency. Now, the problem when you're at one of those other places is a client gets hot, Kevin Uvain or Brian Lord starts calling them around your back. That's f***ed up.

That's bad culture. Remember they were the biggest agent. Mike Ovitz gave them everything they had for lack of a better metaphor, Tiffany. And you know what they did with it? And I think Walmart's a great company, but let's just say they made it Walmart and they didn't leave. Like, you're not empowering people. Like, what kind of life are you? That's horrible. Maybe you did like that question. I thought you wouldn't like it. You actually liked it quite a bit. I would pay the salaries of Brian Lord, Kevin, Yvain, and Richelieu to stay in the job. I would. I would pay their salaries. It's the greatest competition of all time. We asked CAA, the Creative Artists Agency, for comment on Emanuel's assessment. They passed.

Before we ran out of time, I wanted to ask Emanuel about professional golf. He's an avid golfer and an ally of the PGA Tour, whose business model has recently been threatened by a startup called the Live Tour, which is funded by the Public Investment Fund of Saudi Arabia. This presents Emmanuel with two separate conflicts, one economic, the other political, or even moral. The economic conflict has to do with, again, athlete compensation. Phil Mickelson, one of the PGA Tour's biggest stars, left the tour for a massive contract with Live after complaining for years that the PGA Tour not only underpaid its players but wouldn't share the revenue data. Several other big names followed him, including Brooks Koepka and Bryson DeChambeau. Mickelson's claim was seemingly justified when the PGA Tour suddenly came up with many

millions of extra dollars to sweeten the deal for the golfers who stayed. The PGA Tour commissioner is Jay Monahan, and the Live Tour commissioner is former world number one golfer Greg Norman. That's the economic issue you will hear Emmanuel talk about in a minute. The political issue has to do with the funding of the Live Tour, an issue we addressed in an earlier episode of Freakonomics Radio called, What is Sportswashing and Does It Work? The main criticism here is that Saudi Arabia is using golf sponsorship to paper over its record on things like the state-sanctioned

murder of dissident journalist Jamal Khashoggi at the Saudi consulate in Istanbul. The problem for Ari Emanuel is that Saudi leader Mohammed bin Salman, known as MBS, had been a major investor in Endeavor. All right, I want to know about the Saudi public investment fund and that whole story. But let's start with Live Golf. What do you think of Live Golf? You know, I think Jay's done a good thing. Jay Monahan, the PGA Tour commissioner. He responded to the competition.

He responded properly. And I think they pointed out a flaw in the system. Meaning the Saudis and Liv and Greg. You know, we got a call. We got a call, like, from DeChambeau and Greg. You know, we got a call. We got a call like from DeChambeau and Phil. Hey, do you want to finance this? Wait, finance this with the Saudis? No, no, no.

Instead of? I said to Egon, yeah. I said we would put up, meaning Endeavor would put up a billion dollars. Egon is Egon Durbin, the chair of Endeavor's board and a founding principal of Silverlake, the private equity firm that is Endeavor's largest shareholder.

Emanuel calls Durbin the greatest partner I've ever had. Egon then called somebody at the PGA. And, you know, we're all connected in golf. And they said, please don't do it. So we stopped. Right? I'm friends with Jay. We have a lot of business with Jay.

I don't want to hurt Jay. But I just thought, you know, I'm always looking for the next sport, the next thing we can do. So we pulled out. I said to Jay, Jay, we're pulling out, but you have got to figure out an economic solution because you're going to get, it's going to force you. And he did, to his credit. I think Jay did an incredible job. I think Rory helped and Tiger helped and a bunch of guys helped.

Do you have a moral position on Liv being funded by the Saudi Public Investment Fund? Does sports washing, does that accusation concern you? I haven't really thought about it. I have enough on my plate. They're doing what they're doing. But you did have as an investment partner, Mohammed bin Salman, MBS, yes? Okay, so tell me how that money came to you and then why you gave it back. I was somewhere for the UFC making a deal, either in China or in Russia.

I get a call from one of my investors in Abu Dhabi. He says, what are you doing? I said, I'm making this deal. He goes, can you fly to Abu Dhabi? I said, of course. So, seven-hour flight. Flew to Abu Dhabi? I said, of course. So seven hour flight, flew to Abu Dhabi. We met. He said, I want you to go to Saudi Arabia, meet with MBS. I said, okay. He goes, he's going to be, you know, taking over and he wants entertainment.

He's changing what they're doing. And he gave me the whole speech. And I said, fine, I'll fly to Saudi. I flew to Saudi. You met with him directly? I met with MBS. What was that meeting like? He's incredible. I mean, he is as charming as could be. He had this whole vision, bringing entertainment, movies back. And he wanted to spend $30 billion in entertainment.

Well, I can do math. $30 billion. I mean, it's money. And I thought his vision was incredible. So we negotiated. It took about nine months in the negotiation for them to invest. I think it was $400 million. And then, you know,

I think a bad thing happened. But let's be very clear about something. I'm not defending what they did. You know, I've had a brother that's been in two White Houses. Every country does bad things. They just don't do it in an embassy. Right or wrong, we killed an American citizen who was a terrorist with no trial from a drone

during the Obama administration, actually. Right? He was an American. Who was a terrorist? With no trial. From a drone. During the Obama administration, actually. Right? He was an American. He was a terrorist. No trial. Emmanuel is referring to the 2011 drone strike in Yemen that killed Anwar al-Awlaki, an al-Qaeda leader born in New Mexico. That wasn't in an embassy, but that was...

So every country... I just... That was, you know, evident. It was just very difficult. I wish it had not happened for a lot of reasons. Did you talk to him during that period? I don't really remember. I think I talked to Yasser, who runs the PIF. But what was the mechanism then? Did you literally write a check back with interest?

It was a long negotiation. Yeah, we wrote a check back with interest, yeah. Does that preclude you from doing business with him or them again? No, but we wrote a check. Listen, I know everybody thinks things are black and white, and I have a tendency to do that too, right? And we live in this period of time where, you know, there was a period of time it was even worse, and I struggle with this.

And we do business there. I mean, people drive cars that oil. I mean, like, let's get through a bunch of stuff here. So governments do bad things. Let's just say that and then work through all our own emotional ethics. But why was that the case that made you write a check for $400 million? I don't know. I just, you know, I don't really, I don't really know. So when you're talking about meditating yesterday and being happy, you're kind of... Yeah, satisfied.

Satisfied. That's a bad word. I'm never satisfied. But I want to recognize that I am blessed. Okay. There's a Harvard psychologist named Dan Gilbert who studies, you know? Yes. Stumbling on Happiness was a book years ago.

He said he came to the conclusion that his life had been so, like you said, blessed, fortunate, great experiences, of course, a lot of hard work and hardship, blah, blah, blah. But that he felt full, like you eat a good meal. Now, when you eat a good meal. Remember, I starve. Good point. So the metaphor goes off the rails already. But also when you eat a good meal, you're going to get hungry again in a few hours.

But he has this notion of feeling like I've become full in my life. I feel satisfied, essentially. And I don't need or want anymore to chase the things that I've been chasing. I'm curious what you feel about that concept. Well, I'm full when I'm chasing. Here's what I would say to you. I hope I know this. You know, I constantly talk to myself about this.

If I'm not satisfied, happy, full, using your words, I won't be doing it. I'm still happy. Is it the hunt itself? No, no, no. I'm a serial entrepreneur. I think all these things, whether it's setting up a movie for Jim Brooks or Adam McKay, these are the most recent ones, or buying a company or working through the issues of a company, brings me joy. Do you think about the value that the work brings? You know, does it make the world a better

place? I'm in the middle right now of, you know, I've set up a bunch of movies and TV shows. Some of them are just fun. And I think that's important for people. Some of them have meaning in all of our different groups, whether they book departments, podcasts, lectures, entertainment, you know, the new Marty Scorsese movie, that's about a moment in time when the Indians were taken advantage of by white settlers. That was a long moment, we should say. Yeah. Or I got a new Adam McKay movie about lobbyists. So you can have influence. You know, you don't have to be indifferent. This is something that's important. But I think because of entertainment and whatever people put on it, you can have influence. And at times when I think something's wrong, I do that personally and for the company and, you know, what we get behind and et cetera. Now I always, cause I'm now 62 and I'm healthy. I think I'm healthy emotionally and physically. I say to myself, okay, how much longer do you want to do this?

And I look at people not in envy, but like, would that make me happy? And there's people that aren't working anymore. I do ask this question a lot as you get older, right? Hopefully I don't act like I'm 62. I still get up in the morning, get my ass out of bed at 4.45, 5 o'clock, want to get into the office by 7.30, 8 o'clock, make the call. I mean, I'm having a meeting, getting on a plane to England, then going to Madrid, then coming back, then back to New York, then coming back, then going to camp, then I'm going to Tokyo. Yeah. And I enjoy it. So when I don't enjoy it, when I won't show up is when I know I'm not in it. And when I'm not in it, I will not be in it. I'll be out. And Mark Shapiro will be running

the company and it'll be an incredible company and that will be fine. Let me ask you one last question. When we were downstairs before we came in, we were talking about the kind of people you want to surround yourself with, whether it's in business, friends, family, whatever. So I've read and heard as you were learning the business, you had a number of, I don't know if they were formal mentors at all, but it reminds me of some old fashioned council of elders. And I'm just curious how you think about being that kind of person to others and seeking out that kind of decency in people. Cause the world, I mean, especially the world of entertainment and sports politics, these all have big pockets of indecency. You know, there's a lot of, no, you're making a funny face.

You know, business is tough. Yes. In any business, there are a lot of, no, you're making a funny face. You know, business is tough. Yes. In any business, there are some duplicitous people, politics, finance, entertainment, medicine. Please don't say that entertainment is like the only bullshit. So I want to be with people that I think live by their word as much as one can. Of course, you're never seeing the world exactly the way they're seeing the world. But I want to surround myself with people that I like, that I think have standards that I live by. And once you're in my web, for me, you're in my web.

I'll defend. Yeah. To the death. Yeah. You still like to fight. Love it. I love it. When we sat down to talk, I didn't know what to expect from Ari Emanuel. For one thing, I had been warned multiple times by multiple people that he doesn't like interviews, that he gets bored easily, and he might just get up and leave after 20 minutes. The conversation you just heard was an edit of a conversation that lasted around an hour and 45 minutes, but I had no way of knowing at the outset. In fact, right as we were sitting down,

before the mics were rolling, he waved me closer, like, come here, come here. And based on everything I'd been reading about him, my first thought was, what's he going to do, slap me? I know he likes to fight, so I don't know. I didn't move closer. He waved again. I still didn't move. His waving got more animated.

Finally, I leaned in. It turns out he just wanted to pull a loose thread off my jacket. He wanted to clean me up. It made me think of that old folk tale about the mouse who pulls a thorn from the paw of a lion. But wait a minute, he's supposed to be the lion. His name, Ariel, means lion of God. It was yet another reminder that it is a good idea to sit down with people you don't know and see what actually makes them tick. As you could probably tell, I enjoyed this conversation a lot.

I hope you did, too. I will be looking to do more like it in the future. If you have suggestions, I would love to hear them. Our email is radio at Freakonomics.com. Meanwhile, next time on the show, what comes to mind when someone brings up a slippery slope? Oh, you think euthanasia is a good idea, but like, wait till they're executing the grandmas. Why are slippery slope arguments invoked? If the industry is making the slippery slope argument, it means they've run out of substantive arguments. And the slippery slope itself is said

to be slippery. Our decisions today are shaped in considerable part by our decisions yesterday, and they will in turn shape our decisions tomorrow. Let's slide down the slippery slope together. That's next time on the show. Until then, take care of yourself. And if you can, someone else to. Freakonomics Radio is produced by Stitcher and Renbud Radio. You can find our entire archive on any podcast app or at Freakonomics.com, where we also publish transcripts and show notes. This episode was produced by Alina Kullman and mixed by Greg Rippin, with help from Jeremy Johnston and Daniel Moritz-Rabson. Our staff also includes Julie Kanfer, Zach Lipinski,

Morgan Levy, Ryan Kelly, Catherine Moncure, Rebecca Lee Douglas, Eleanor Osborne, Jasmine Klinger, Daria Klenert, Emma Terrell, Lyric Bowditch, and Elsa Hernandez. Our executive team is Neil Carruth, Gabriel Roth, and me, Stephen Dubner. Our theme song is Mr. Fortune by the Hitchhikers. All the other music was composed by Luis Guerra. As always, thanks for listening. If he didn't hit the pin on 15 and then say in the interview, yes, I realized that I was three feet two, or whatever he said, then he wouldn't have lost that stroke.

He would have won that Masters. It would have been over. Let's do a golf podcast. Yes. The Freakonomics Radio Network. The hidden side of everything. Stitcher.